The Employees Provident Fund (EPF) yesterday increased its stake in Sri Lanka’s biggest private sector bank, Commercial Bank, to around 9%, by picking up a 1.2% stake for Rs. 1.19 billion.
Giving a boost to an otherwise bearish market, 4.59 million shares of Commercial Bank traded for Rs. 1.24 billion. A total of 4.4 million shares changed hands via crossings at Rs. 270 per share with the buyer being EPF. The seller was a foreign fund as non-national shareholding of COMBank declined by 4.4 million yesterday.
As at end 2010, EPF’s stake in COMBank was around 5% and in recent months it has been collecting blocks of 1% and is now estimated to be owning a nearly 9% stake.
The share price of COMBank dipped by 90 cents and closed at Rs. 268.10. The COMBank's AGM takes place today at 10.30 a.m. at Colombo Hilton.
Deals on COMBank and Union Bank saw the Bank, Finance and Insurance sector contributing most to the market turnover whilst the sector index rose by 0.54%.
Union Bank debut fails to light up bourse
The debut of record-setting Union Bank of Colombo failed to light up the stock market yesterday, in addition to producing a mixed performance overall.
Around a 5% stake of the company amounting to 17.46 million shares (but well above the 15 million issued via the Initial Public Offering) of Union Bank debuted, generating a turnover of Rs. 715.7 million. Offered at Rs. 15 in the IPO, the share opened at Rs. 45, which incidentally was its highest before closing at Rs. 38.40, up by 53% or Rs. 13.40.
The 17.4 million shares changed hands via 16,164 trades. There were three crossings (1,500,000 shares at Rs. 42 and 765,000 shares at Rs. 31).
Given the Rs. 375 m IPO’s 350 times oversubscription, described as one of the highest globally, some viewed the debut performance of Union Bank as below par, whilst others said above 50% gain was significant in a bearish market.
Its peak of Rs. 45 was as expected by some whilst the more bullish forecast Rs. 50, but the closing below Rs. 40 was a damper.
Giving credence to the tone of underperformance, NDB Stockbrokers said: “Union Bank attracted investors although a lower price appreciation was witnessed than anticipated, especially considering its record-breaking oversubscription.”
Deals on Union accounted for the second largest turnover, trailing by mega deals on Commercial Bank worth Rs. 1.24 billion.
Commenting on the overall market, NDB said indices were volatile throughout the trading hours and closed in red with selling pressure creeping in.